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AT&T plans a new streaming service using Warner Bros. shows and movies

By Stephen Battaglio
Tribune News Service

Sept. 12, 2018

AT&T is developing a new streaming video service that will use the Warner Bros. catalog of TV shows and movies.

“There is an amazing library of media and entertainment content that is really not being put to work, that’s available for direct-to-consumer distribution,” AT&T Chairman Randall Stephenson said Wednesday at the Goldman Sachs Communicopia conference in New York.

Stephenson said John Stankey, chief executive of AT&T’s WarnerMedia unit – the former Time Warner – is working on a “new direct-to-consumer model” that will be announced later this year.

Such a plan would follow the path of Walt Disney Co., which is planning to launch a direct-to-consumer streaming service using its vast array of TV and movie titles in 2019.

WarnerMedia’s sports properties could be part of the new product as well, Stephenson said. Its Turner channels carry the NCAA men’s basketball tournament and NBA games.

Stephenson said any new product would be a supplement to premium cable network HBO, which already has a direct-to-consumer offering. He emphasized that he does not want to diminish the channel’s reputation as a premium brand.

Stankey recently suggested at an internal meeting, details of which were leaked to the press, that HBO needed to become “broader” to compete with streaming giant Netflix, a suggestion that raised eyebrows in the industry. HBO – once marketed with the slogan “It’s not TV, it’s HBO” – has long made its mark by creating distinctive programming that differentiates it from ad-supported TV networks.

Stephenson said he is not expecting HBO to match the massive investment of Netflix, which is putting as much as $8 billion a year into programming. But he agreed with Stankey’s assessment that HBO needs more content to keep its subscribers from leaving when its biggest hits – such as “Game of Thrones” – are not on the air.

“HBO is a very unique brand and a very unique product,” Stephenson said. “It is the Tiffany of media and entertainment. What Stankey desires to do is step up the investment in content there to make sure we have a more robust cycle of content coming throughout the year and throughout the week.”

Stephenson expressed confidence that HBO chief Richard Plepler can develop more high-quality programming for the network. “He is very bullish that with a modest amount of additional investment that he can really begin to do what we’re talking about here,” he said.

AT&T can fund increased investment in HBO programming by reducing and consolidating some of the administrative and back-office costs across the WarnerMedia properties, Stephenson said.